Motor fuel taxes in Canada
Compulsory levies on car and truck energy sources in the North American country
From Wikipedia, the free encyclopedia
In Canada, motor vehicles are primarily powered by gasoline or diesel fuel. Other energy sources include ethanol, biodiesel, propane, compressed natural gas (CNG), electric batteries charged from an external source, and hydrogen. Canada, unlike most countries, has excise taxes and other taxes on gasoline, diesel, and other liquid and gas motor fuels (collectively called fuel taxes), and also taxes electricity at various administrative levels. Most provinces and territories in Canada also have taxes on these motor fuels, and some metropolitan areas such as Montreal, Greater Vancouver, and Victoria impose additional taxes.
Additionally, Canada's federal (national) government collects value-added tax (GST) across the country, and some provincial governments also collect a provincial sales tax (PST), which may be combined with the GST into a single harmonized sales tax (HST). HST, GST, or GST + PST where applicable, are calculated on the retail price including the excise taxes.[1]
Fuel tax rates across Canada
Gasoline
| Government | Federal Excise Tax (CAD¢/L) [2] | Prov/Terr Excise Tax (CAD¢/L) | Fed Carbon tax (CAD¢/L) [3] |
Local Fuel Levy (CAD¢/L) | Total Pre-Sales tax (CAD¢/L) | HST, GST, or GST + PST/QST (%) |
Minimum tax incl. sales taxes (CAD¢/L) |
Min. tax (CAD¢/US gal) |
|---|---|---|---|---|---|---|---|---|
| Canada (average) | 10 | 10.33 | 2.71 | 23.16 | 9.68% | 25.41 | 96.2 | |
| Newfoundland and Labrador | 10 | 14.50 [4] | 0 | 24.50 | 15% | 28.18 | 106.7 | |
| Prince Edward Island | 10 | 8.47 [5] | 0 | 18.47 | 15% | 21.24 | 80.4 | |
| Nova Scotia | 10 | 15.50 [6] | 0 | 25.50 | 15% | 29.33 | 111.0 | |
| New Brunswick | 10 | 10.87 [7] | 0 | 20.87 | 15% | 24.00 | 90.9 | |
| Quebec[nb 1] | 10 | 19.20 [8] | 0 | 29.20 | 14.975% | 33.57 | 127.1 | |
| Montréal, QC | 10 | 19.20 [8] | 3 [9] | 32.20 | 14.975% | 37.02 | 140.1 | |
| Ontario | 10 | 9.0 [10] | 0 | 19.00 | 13% | 21.47 | 81.3 | |
| Manitoba | 10 | 0[11] | 0 | 10.00 | 12% | 11.20 | 42.4 | |
| Saskatchewan | 10 | 15 [12] | 0 | 25.00 | 5% | 26.25 | 99.4 | |
| Alberta | 10 | 13 [13] | 0 | 23.00 | 5% | 24.15 | 91.42 | |
| British Columbia[nb 2] | 10 | 7.75 [14] | 0 | 6.75 [14] | 24.50 | 5% | 25.73 | 97.40 |
| Vancouver, BC | 10 | 1.75 [14] | 0 | 6.75 + 18.5 [14] | 37.00 | 5% | 38.85 | 147.06 |
| Victoria, BC | 10 | 7.75 [14] | 0 | 6.75 + 5.5 [14] | 30.00 | 5% | 31.50 | 119.24 |
| Yukon | 10 | 6.20 [15] | 0 | 16.20 | 5% | 17.01 | 64.4 | |
| Northwest Territories | 10 | 10.70 [16] | 17.61 | 38.31 | 5% | 40.23 | 152.3 | |
| Nunavut | 10 | 6.40 [17] | 0 | 16.40 | 5% | 17.22 | 65.2 |
Diesel
| Government | Federal Excise Tax (CAD¢/L) [2] | Prov/Terr Excise Tax (CAD¢/L) | Fed Carbon tax (CAD¢/L) [3] |
Prov Carbon tax (CAD¢/L) |
Local Fuel Levy (CAD¢/L) | Total Pre-Sales tax (CAD¢/L) | HST, GST, or GST + PST/QST (%) |
Minimum tax incl. sales taxes (CAD¢/L) |
Min. tax (CAD$/US gal) |
|---|---|---|---|---|---|---|---|---|---|
| Canada (average) | 4 | 11.34 | 6.12 | 22.26 | 9.3% | 24.32 | 0.921 | ||
| Newfoundland and Labrador | 4 | 16.50 [4] | 0 | 20.5 | 15% | 23.58 | 0.892 | ||
| Prince Edward Island | 4 | 14.15 [5] | 0 | 18.15 | 14% | 20.69 | 0.783 | ||
| Nova Scotia | 4 | 15.40 [6] | 0 | 19.4 | 15% | 22.31 | 0.845 | ||
| New Brunswick | 4 | 15.45 [7] | 0 | 19.45 | 15% | 22.37 | 0.847 | ||
| Quebec | 4 | 20.20 [8] | 24.2 | 14.98% | 27.82 | 1.053 | |||
| Ontario | 4 | 14.30 [10] | 0 | 18.3 | 13% | 20.68 | 0.783 | ||
| Manitoba | 4 | 14 [18] | 0 | 18 | 12% | 20.16 | 0.763 | ||
| Saskatchewan | 4 | 15 [12] | 0 | 19 | 5% | 19.95 | 0.755 | ||
| Alberta | 4 | 13 [13] | 0 | 17 | 5% | 17.85 | 0.676 | ||
| British Columbia[nb 2] | 4 | 8.25 | 0 | 0 | 6.75 [14] | 19 | 5% | 19.95 | 0.755 |
| Vancouver, BC | 4 | 2.25 [14] | 0 | 0 | 6.75 + 18.5 [14] | 31.5 | 5% | 33.08 | 1.252 |
| Victoria, BC | 4 | 8.25 | 0 | 0 | 6.75 + 5.5 [14] | 21.45 | 5% | 22.52 | 0.853 |
| Yukon | 4 | 7.20 [15] | 0 | 11.2 | 5% | 11.76 | 0.445 | ||
| Northwest Territories | 4 | 9.10 [16] | 13.7 | 26.8 | 5% | 28.14 | 1.065 | ||
| Nunavut | 4 | 9.10 [17] | 21.39 | 34.49 | 5% | 36.21 | 1.371 | ||
Notes
Tax collection and rate changes
In March 2022, the Alberta government announced it would suspend the collection of the fuel tax starting April 1, as a way to fight the rising cost of fuel.[19]
In December 2023, the Alberta government announced that with lower oil prices, the fuel tax would be phased back in after Dec. 31, 2023.[20]
On March 15, 2025 the Government of Canada enabled regulations that set the federal carbon tax to 0. The effective date for the change was April 1, 2025. The affected provinces and territories were Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Saskatchewan, and Yukon.[21] After this announcement, Premier of British Columbia David Eby announced the elimination of the BC carbon tax on April 1, 2025.[22]
Tax revenues
The Government of Canada collects about $5 billion per year in excise taxes on gasoline, diesel, and aviation fuel[23] as well as approximately $1.6 billion per year from GST revenues on gasoline and diesel (net of input tax credits). The Canada Revenue Agency, a part of the government, collects these taxes.
Collectively, the provincial governments collect approximately $8 billion per year from excise taxes on gasoline and diesel.
The federal taxes go into general coffers and help to fund a range of programs: $2 billion of the approximately $5 billion collected from federal excise taxes goes into the now permanent annual Gas Tax Fund for municipal infrastructure. Provincial tax revenues usually go to fund road repair and construction, and additionally in some provinces a portion of revenues (for example, 2 cents/litre in Ontario) is also distributed directly to municipalities.[24]
Criticism
In Quebec, an Ipsos poll released in 2022 found that 73% of the population thought that the taxes levied on fuel were too high.[25]